Increases in protein levels of XIAP in cancer cells have been associated with resistance to apoptosis induced by cellular stress. Herein we demonstrate that the upregulation of XIAP protein levels is regulated by MDM2 at the translational level. MDM2 was found to physically interact with the IRES of the XIAP 5'-UTR, and to positively regulate XIAP IRES activity. This XIAP IRES-dependent translation was significantly increased in MDM2-transfected cells where MDM2 accumulated in the cytoplasm. Cellular stress and DNA damage triggered by irradiation induced the dephosphorylation and cytoplasmic localization of MDM2, which also led to an increase in IRES-dependent XIAP translation. Upregulation of XIAP in MDM2-overexpressing cancer cells in response to irradiation resulted in resistance of these cells to radiation-induced apoptosis.